Former Swiggy staff alleges food delivery app not paying salary on time, indulging in malpractices

Former Swiggy staff alleges food delivery app not paying salary on time, indulging in malpractices

The former employees, who were part of the sales team, have written that they had been trained to arm-twist restaurants to increase commissions for the platform whereby the commissions should reach an average of 30-40% by 2022.

Bad unit economics, hidden costs, loss of money in marketing, are ground realities, which according to the employees have made the company — a house of cards. (Image: Reuters)

An anonymous blog by a few former employees of Swiggy has alleged that the food delivery app has been indulging in unethical practices such as artificially inflating delivery volumes and not making salary payments on time. The former employees, who were part of the sales team, have written that they had been trained to arm-twist restaurants to increase commissions for the platform whereby the commissions should reach an average of 30-40% by 2022. The blog said those restaurants which had partnered with Swiggy are not in a position to backout, despite having to surrender more money in commissions than their net margins would allow, because Swiggy in some areas contribute a a significant portion of their revenues. The post claims to speak for hundreds of Swiggy’s employees who are burdened with a high rate of attrition, unpaid bonuses, false promises and uncleared settlements. Bad unit economics, hidden costs, loss of money in marketing, are ground realities, which according to the employees have made the company — a house of cards.

‘’At 40% commission, restaurants will bleed to death. And most of these businesses which pay 40% will be the small guys, because the big guys will never pay anything more than 20%,’’ the blog read. The company in its response has said the blog has been written with a malicious intent. The blog had added that there were articles in the media which claimed that the orders per month crossed the 4-million mark. The authors have copy-pasted a screenshot of what they said was the actual order volume in June which was 2.76 million, alleging that the volumes were inflated by recording fake orders.

Swiggy in its response said, ‘’The article (blog) carries inaccurate facts regarding business and order numbers. It not only references employee departures from a year and a half back, but also presents details on our partners out of context and with mischievous intent,’’ the company said in an emailed response. ‘’Swiggy has grown over the last few years on the back of strong support from our restaurant partners, employees, delivery executives, consumers and investors. Our restaurant partners are at the heart of our success,” Swiggy said, responding to FE’s queries on the matter.

Swiggy had raised $80 million in its Series E round from Naspers in May 2017. According to research platform Tofler, Swiggy’s revenues for FY16 stood at Rs 23.59 crore while losses widened to Rs 137.18 crore from Rs 2.12 crore in FY15.